Nov 13 (Reuters) - The US antitrust regulator filed a lawsuit on Friday in a New York federal court to block Cencora's $3.5 billion sale of its MWI Animal Health unit to veterinary supplier Covetrus, arguing the deal would raise costs for clinics and pet owners.
Covetrus responded that the FTC's case relies on a narrow and outdated view of the market.
• The regulator said the proposed transaction would combine the two largest distributors of veterinary medicines and clinic supplies in the US, effectively
wiping out head-to-head competition
• Cencora agreed in February to sell MWI to privately held Covetrus
• The lawsuit was filed in the US District Court for the Southern District of New York and is joined by attorneys general from 13 states
• Covetrus said in a statement that the FTC's lawsuit "does not reflect an accurate understanding of how veterinarians actually buy the products they need"
• The company is fully prepared to defend the deal in court, it said
• Cencora did not immediately respond to a Reuters request for comment
• J.P. Morgan analysts said they do not expect the FTC challenge to hurt Cencora's forecast
• The brokerage expects Cencora to push for the deal on its strategic merits, but said the company would likely "look for alternative MWI transactions" if the sale is ultimately blocked
• Cencora's shares were up about 2% in midday trading
(Reporting by Kamal Choudhury in Bengaluru; Editing by Sahal Muhammed)
